Cost-Benefit Analysis: Substituting Ground Transportation for Subsidized Essential Air Services

Since the Airline Deregulation Act of 1978, the U.S. Department of Transportation (DOT) has been subsidizing air service to small rural communities through the Essential Air Service (EAS) program. The original intent of the program was to maintain some level of air service to rural communities that would otherwise not have any. The Rural Survival Act of 1996 established the permanence of the EAS program; the act was fueled by the idea that reliable air services are vital to local rural economies. This idea has been somewhat challenged in recent studies that found little to no economic impacts of air traffic. This project entertained the theory that intercity traffic volume, and not air traffic volume alone, is what affects the economic outcomes of certain geographical areas. A cost-benefit analysis of substituting subsidized air service with a subsidized ground service is presented and concludes that an intercity ground service network can create substantial cost savings on both a per round trip basis and a round trip-seat basis.

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  • Supplemental Notes:
    • This document was sponsored by the U.S. Department of Transportation, University Transportation Centers Program.
  • Corporate Authors:

    University of Missouri, St. Louis

    Center for Transportation Studies
    154 University Center, One University Boulevard
    St. Louis, MO  United States  63121

    Midwest Transportation Center

    2711 South Loop Drive, Suite 4700
    Ames, IA  United States  50010-8664

    Department of Transportation

    Office of Assistant Secretary for Research and Technology
    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590

    Iowa State University, Ames

    Institute for Transportation
    2711 South Loop Drive, Suite 4700
    Ames, IA  United States  50010-8664

    Iowa Department of Transportation

    Ames, IA  United States  50010

    Research and Innovative Technology Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Authors:
    • Mundy, Ray A
    • Bao, Ken
    • Wood, Abby
  • Publication Date: 2015-12


  • English

Media Info

  • Media Type: Digital/other
  • Edition: Final Report
  • Features: Appendices; Figures; Maps; References; Tables;
  • Pagination: 76p

Subject/Index Terms

Filing Info

  • Accession Number: 01596777
  • Record Type: Publication
  • Report/Paper Numbers: InTrans Project Report Paper 187
  • Contract Numbers: DTRT13-G-UTC37
  • Created Date: Apr 8 2016 10:14AM